Delaying Vote, Debt Panel Splits on Taxes and Spending

From left, Mitch McConnell, John A. Boehner and Eric Cantor after their meeting with President Obama.Credit
Stephen Crowley/The New York Times

WASHINGTON — The chairmen of President Obama’s debt-reduction commission have been unable to win support from any of the panel’s elected officials for their proposed spending cuts and tax increases, underscoring the reluctance of both parties to risk short-term political backlash in pursuit of the nation’s long-term fiscal health.

The chairmen of the commission — former Senator Alan K. Simpson, a Republican, and Erskine B. Bowles, a Democrat and former chief of staff to President Bill Clinton — delayed for two days, until Friday, a final vote by its 18 members.

They said the delay was to provide more time to look at the final package, but it also gave them further opportunity to woo some of the 12 members of Congress on the commission, six from each party, whose support will be critical if the plan is to be taken seriously as a blueprint for eventual legislation.

The commission pressed ahead with its last-ditch efforts as Mr. Obama and Republican leaders opened negotiations on Tuesday in search of what the president called “sensible common ground” in their debate over extending the Bush-era tax cuts. It is the most immediate domestic issue facing them and a key test of whether the two sides can work together in the new political order.

During their first meeting since the midterm elections rearranged the power map in Washington, Mr. Obama told Representative John A. Boehner, the incoming House speaker, and Senator Mitch McConnell, the Senate Republican leader, that he regretted not reaching out to them more in his first two years in office and vowed to do better.

Mr. Obama assigned Treasury Secretary Timothy F. Geithner and Jack Lew, the White House budget director, to put together a tax deal with Congress, and he suggested there would be more talks with the leaders of both parties, including a possible session at Camp David.

“Today we had the beginning of a new dialogue that I hope — and I’m sure most Americans hope — will help break through the noise and produce real gains,” the president said after a two-hour session that included Democratic Congressional leaders as well. “And as we all agreed, that should begin today because there’s some things we need to get done in the weeks before Congress leaves town for the holidays.”

Photo

President Obama said he regretted not reaching out to Republican leaders more and vowed to do better.Credit
Doug Mills/The New York Times

With a negotiating framework in place, lawmakers said they could begin to see the contours of a potential outcome that would extend the Bush-era tax cuts temporarily while giving Democrats some concessions on unemployment compensation, the estate tax or other tax cuts that were included in the stimulus package and will also expire this year.

“Now it is all about what Democrats can get,” said one Democratic senator who did not want to be identified talking about the prospect of the White House and Congressional Democrats conceding on extending the tax cuts for affluent Americans.

Still, House Democrats said they could press ahead as early as Thursday with a vote to allow the tax breaks for income over $250,000 for a family to expire even though such a plan appears unlikely to be able to clear a Senate filibuster, given solid Republican opposition and resistance from several Democrats. Democrats said they could use the votes to make their position clear and also illustrate that they do not have the votes to block extension of those tax cuts, clearing the way for concessions.

Even as Congress moved toward extending some or all of the tax cuts, the commission was facing a potential break between its elected officials and its members who do not have to face the voters, people familiar with the panel’s deliberations said.

The panel needs the agreement of 14 of its 18 members for its recommendations to go to Congress for a vote, a prospect that has been a long shot since it convened earlier this year.

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But a failure to win support from at least some lawmakers from both parties would undercut the panel’s ability even to set the terms of a debate between the administration and Congress over how to proceed in addressing chronic annual budget deficits and a national debt that is mounting toward unsustainable levels.

The chairmen’s plan would cap annual spending for both domestic and military programs; build on the cost-savings steps in Mr. Obama’s health care law; raise Social Security payroll taxes for affluent taxpayers and slowly increase the retirement age to 69 from 67; and reduce or eliminate a raft of popular tax breaks, including the mortgage interest deduction, in return for lower income-tax rates for individuals and corporations.

Among the lawmakers, the Republicans generally oppose the chairmen’s draft plan because of its tax increases for upper-income Americans. The elected Republicans on the panel are Senators Judd Gregg of New Hampshire, Tom Coburn of Oklahoma and Michael D. Crapo of Idaho, and Representatives Dave Camp of Michigan, Paul D. Ryan of Wisconsin and Jeb Hensarling of Texas.

The elected Democrats on the commission are resisting the scale of proposed reductions from future health care and Social Security programs, according to people familiar with the discussions. Those Democrats are Senators Richard J. Durbin of Illinois, Max Baucus of Montana and Kent Conrad of North Dakota, and Representatives Jan Schakowsky of Illinois, Xavier Becerra of California, and John M. Spratt Jr. of South Carolina.

While the three House Republicans are said by people involved in the deliberations to be unbending in their opposition to the blueprint developed by the chairmen, the three Senate Republicans are not. Similarly, except for Ms. Schakowsky, the Democratic House and Senate members are said to be still negotiating with one another and the chairmen toward some compromise.

“Regardless of how the vote turns out,” Mr. Bowles said at a news conference on Tuesday, he and Mr. Simpson will have won by demonstrating the difficult choices to be made on taxes and spending. “The era of deficit denial in Washington is over,” he said.

Among the nonelected officials said to be supportive of the chairmen are Alice M. Rivlin, a former budget director to Congress and to Mr. Clinton; David Cote, the chief executive of Honeywell International, and Ann Fudge, a former chief executive of Young & Rubicam.

The clash over taxes and government spending are defining the early stages of the post-election maneuvering in Washington and seem likely to remain in the forefront as the 2012 presidential campaign heats up next year.

House and Senate Republicans were adamant after the White House meeting that they would not give any ground on extending all the tax cuts. Top aides said they believed the negotiations by administration officials and Senators Baucus and Jon Kyl, Republican of Arizona, as well as Representatives Camp and Chris Van Hollen, Democrat of Maryland, would reach into other tax issues as lawmakers try to find a deal.

Members of both parties warned that while the door had opened to some possible resolution of what has proven to be an extremely difficult issue to resolve, the outcome remains uncertain.

“We had a very nice meeting today,” Mr. Boehner said. “Of course, we’ve had a lot of very nice meetings. The question is, can we find the common ground the American people expect us to find?”

Carl Hulse contributed reporting.

A version of this article appears in print on December 1, 2010, on Page A1 of the New York edition with the headline: AS TIME RUNS OUT,
DEBT COMMISSION
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